@Trader13 Because they can. This is why unregulated markets don't work, you become a monopoly and do whatever the hell you want. It seems SEC was watching porn again when this was happening.
This still doesn't make sense to me. I would think if ICE were operating in it's own self-interest, they would give a break on the data fees to non-pro traders and benefit from the increased trading volume. Do they have some ulterior motive to raise barriers to retail traders?
What percentage of volume comes from retail traders? I'm guessing it doesn't move the needle for them.
That might just be the reason. I just assumed there are herds of retail traders throwing orders at every active market. I might be wrong. Maybe most of the volume in futures markets is from HFT algos and institutions.
So any change in fees is justified? Did disseminating quotes become 50 times more expensive all of a sudden? If they'd charge $20k for quotes, would you be saying the same thing?
Good pricing is never based on cost to provide the service, otherwise MS Office would only cost a nickel. It's based on the price the market will take, taking into account the elasticity of demand to maximize your profits. In this case it seems they've not found it worthwhile to offer price discrimination with a retail only offering, and the analysis shows they maximize profit by raising prices because the increase over the entire customer base is greater than the loss of the marginal low end customers. This is basic markets and pricing, understandable to criticize it if we're talking about lifesaving drugs maybe but this is a financial exchange for Pete's sake!
Financial exchange dealing with products that are crucial to the economy. Most food items aren't essential, we can survive fine without them, does that mean we should let monopolies rule? I understand your reasoning but I'm complaining as a customer. You might also want to read up on ICE's next venture in non-display fees.
I certainly won't argue in favor of monopolies but this isn't one. There are ETFs you can trade that track the same index (I get the tax treatment) and nothing is stopping another exchange from offering an identical basket of stocks or an IB from offering a derivative or note that provides the same returns or even you from starting an exchange that offers this product. Setting yourself up in an industry with high barriers to entry and low supplier and buyer power is just astute application of basic Porters 5 forces strategy, not illegal anticompetitive behavior. The problem is what would your remedy be?